Discounting vs. Brand Building

In the very difficult world of retailing, discounting is the guaranteed ticket to store traffic and potential brand erosion. Recently I read about Abercrombie same store sales being down, a predictable outcome in a soft economy for a retailer who practices a hi-low pricing strategy. Abercrombie prices are traditionally sticker shock high. But they always have 2 or 3 sale item tables, where all the teens with baby sitting earnings flock to seek a good sale. In a soft economy their sales will skew disproportionately to these discount items, eroding margins, and their full price merchandise will wither on the shelves.  By contrast, The North Face exercises remarkable restraint in its pricing and discounting. I had the chance to walk their downtown Chicago store today, examine their merchandise and talk to their associates. Their merchandise is very high quality and fashionable. Certainly better quality than the minimal cotton outfits found in other fashionable retailers. Their pricing is not cheap, but it is not high either. In fact, it appears to be fair. There were no sale items in the entire store, allowing me to look through the store at the items we needed, not just the ones that were on sale. Finally, the imagery was aspirational, not the exploitative type that now targets the teen-age set. North Face sets an example on an alternative to high low pricing, that allows your brand to sell on its merits. It gives the customer the knowledge they did not over pay and that they will not see the same item on sale 4 months down the road. An excellent example for brands contemplating pricing strategies in today's economy.